Fluctuating market, positive sign for coffee growers

At the end of the trading session on October 20, 10, the coffee market world recorded mixed developments. Robusta coffee prices on the London exchange increased slightly, while Arabica coffee prices on the New York exchange and the Brazilian market tended to decrease slightly. However, in general, world coffee prices remained high, creating positive momentum for the domestic market.

Specifically, the price of Robusta coffee on the London floor for November 11 delivery reached 2024 USD/ton, up 4.702 USD/ton compared to the previous day. The following delivery terms also recorded similar increases. This shows that although the market is somewhat quiet, Robusta still receives attention from investors.

Meanwhile, the price of Arabica coffee on the New York floor on the morning of October 20, 10 tended to decrease slightly. The December 2024 delivery period reached 12 cents/lb, up 2024%, but the following delivery periods had lower increases, even the May 257.30 delivery period decreased slightly by 0,84%. This difference reflects investors' caution towards Arabica in the current context.

Similarly, Brazilian Arabica coffee prices also recorded mixed fluctuations. The December 12 delivery period decreased by 2024%, while the May 0,85 and July 5 delivery periods increased by 2025% and 7%, respectively.

The domestic coffee market also reflected similar developments with the price of green coffee beans in the Central Highlands provinces fluctuating between 111.100 - 111.700 VND/kg, a slight increase compared to yesterday.

Based on the above developments, it can be predicted that coffee prices tomorrow, October 21, 10, will continue to increase slightly, however, fluctuations in the market are inevitable.

One of the key factors affecting coffee prices is demand. Global coffee demand is currently high, especially from major export markets such as the US, Europe and Asian countries. The rise of the middle class, the popularity of coffee culture, and the increasing demand for specialty coffee are the main drivers of coffee consumption growth.

However, the downside of high demand is that global coffee supply is facing many difficulties. Vietnam's coffee output in the 2024/2025 crop year is forecast to decrease by 5-10% due to the impact of climate change. Vietnam's current harvest is also very small, not enough to serve the international market.

In addition, prolonged drought in Brazil, the world’s top coffee producer, has severely affected crop yields. Although rain has fallen recently, it may be too late for the trees to fully recover before the new crop is harvested.

Production problems in Brazil and Asia due to adverse weather conditions have kept supplies below demand for three years. If the next Brazilian crop comes in below potential, global supplies could again fall short of demand, leading to further increases in coffee prices.

In the context of limited supply and high demand, coffee prices are expected to remain high in the coming time, bringing positive signals to coffee growers. However, the coffee market is very sensitive to unexpected factors, so coffee growers need to closely follow the market situation to develop appropriate production and business strategies.

In addition, investors also need to pay attention to information about government policies, exchange rate fluctuations, and other unexpected factors to make reasonable investment decisions.

Source: Vietnam.vn